South Korea posts worst growth figure for a decade in Q1

SEOUL: South Korea’s economy shrank 0.3 percent in the first quarter, its worst performance for a decade, its central bank said, as exports fell and companies cut investment amid the US-China trade dispute.

It was the largest contraction for Asia’s fourth-biggest economy since a 3.3-percent drop in late 2008 at the height of the global financial crisis.

The trade-dependent country last posted negative growth – of minus 0.2 percent – in October-December 2017.

Falling exports and capital investment have put a dent in the economy despite increased government and consumer spending, the central Bank of Korea said in a statement.

Exports shrank 2.6 percent quarter-on-quarter, a sharp contrast from a year earlier when they rose 4.4 percent, riding on solid demand for memory chips – a key South Korean product.

Infrastructure investment dropped 10.8 percent over the same period, the largest contraction since a 24.8-percent reduction in early 1998 when the country received a $58-billion bailout package from the International Monetary Fund.

President Moon Jae-in’s government on Wednesday approved a $5.8-billion supplementary budget to boost exports and address air pollution.